ST. PAUL – The Minnesota House has reached bipartisan agreement on the framework of a new state budget that that includes the largest spending reduction in Minnesota history to address a looming shortfall.
House Speaker Rep. Lisa Demuth, R-Cold Spring, said legislators have agreed to cut $4 billion from the current budget, with an additional $1.2 billion reduction in 2026-27. Demuth said reduced spending is essential after Democrats in full control of the Capitol spent the $18 billion surplus, raised taxes by $10 billion and increased the state budget by $20 billion – a 40-percent hike – in 2023. The state now faces a projected $6 billion shortfall.
“House Republicans are holding strong on fiscal responsibility, securing budget figures that would represent the largest spending cut in state history and taking a major step toward fixing the shortfall,” Demuth said. “I look forward to our committee chairs working to put together a common-sense budget that makes life more affordable for Minnesotans. At the same time, we need to continue working to crack down on fraud, waste and abuse that is costing taxpayers dearly and damaging the state’s bottom line.”
Education is one area of the budget where Demuth said different approaches need to be reconciled during the budget-making process. Gov. Tim Walz proposes trimming more than $240 million from education in 2026-27 and another $445 million in 2028-29. This includes cutting merit-based teacher compensation (Q Comp), special education transportation, and non-public pupil support.
Meanwhile, Demuth said school districts are feeling the weight of more than 65 unfunded mandates placed on them in 2023. This includes a new leave program, sick-time requirements, and unemployment insurance mandates for hourly school-year employees applied during the summer months.
“Our children continue falling behind in the classroom, yet more and more mandates are putting school districts in dire straits financially,” Demuth said. “We need to turn this around by eliminating micromanagement, mandates, and misplaced priorities in Minnesota’s K-12 education system so we can focus on helping our students succeed.”
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